Every month, millions of people struggle to get approved for a bad credit loan. Short terms loans for bad credit are typically given based on very thin criteria and the cost can be astronomical with the interest rate skyrocketing near 20% higher than those looking for a decent loan. However, there is an alternative way for you to bypass all this hassle and even get approved first time around with low interest rates by getting your credit evaluated before taking out any loans.
The Formula
There is a magic formula used by some lenders that will help you obtain an instant creditworthy rating without having to pay inflated interest rates. The process is quite straightforward, and you can even implement it immediately if you wish. What you need is to gather three pieces of data from your personal credit report:
- 35% of your credit score: This criteria has to be checked first because it determines whether or not you are approved for a loan, and the higher its percentage, the better chances of obtaining one.
- 10% of your current debt: It’s the amount that determines the size of your monthly payment should the lender decide to extend their offer.
- 6 months’ worth of your salary: This is because the size of the loan you will be taking out will be based on the total amount of your income.
- So basically, by checking off those three criteria from your credit report, you will be able to secure a loan before any other lender or broker. The beauty of the whole system is that once you have completed this process, all that’s left for you to do is apply for a bad credit loan and walk away with a clean sheet.
The Procedure
Basically, once you have gathered all the three pieces of information from your credit report, you can proceed to apply for a bad credit loan. What you need to do is gather all pertinent documents that will show your income, since this will determine how much monthly payment you’ll be making on the loan. The loan provider will then decide whether or not they want to extend an offer based on your report and the criteria mentioned above. After reviewing it, they will either approve or decline their offer for a loan in accordance with your current creditworthiness. If it’s approved, then all you have to do is continue on with the application and wait for the money to be deposited into your account.
